Exam 1: Uses of Accounting Information and the Financial Statements

How do the balance sheets of corporations illustrate the accounting concept of separate entity?

Which of the following assets could be described as nonphysical?

The board of directors appoints the audit committee,which in turn performs an independent audit of the company's records.

Earned income is a measure of profitability.

One way of stating the accounting equation is: Assets + Liabilities = Stockholders' Equity.

The primary external users of accounting information are investors and creditors.

Most business enterprises in the United States are

The purpose of an audit is to

Kalis Corporation's stockholders' equity equals one-third of the company's total assets.The company's liabilities are $120,000.What is the amount of the company's stockholders' equity?

The purchase of equipment is an example of a financing activity.

The separate entity concept requires that

Which of the following items has no effect on stockholders' equity?

The economic resources to which the owners have claim are represented by stockholders' equity.

The authoritative body currently responsible for establishing accounting practice is the

The retained earnings figure is typically divided into par value and additional paid-in capital.

An increase in revenue will result in an increase in stockholders' equity.

The income statement is also known as the statement of financial position.

An accounting measurement is concerned with all except which of the following?

The audit committee is responsible for all of the following except

The board of directors carries out the day-to-day operations of a corporation.